Before Milagro Cantina opened its doors at 5 Mercer Street, many Canadians thought “Mexican food” consisted of burritos, nachos, or chimichangas bursting with ground beef, sour cream, and cheddar cheese. Milagro changed this misconception by offering its diners classic Mexican cuisine, spirits, and cocktails in Canada’s first authentic cantina.
Originally from Mexico City — and a restaurateur of over 35 years — Arturo Anhalt noticed the lack of authentic Mexican restaurants in Toronto soon after emigrating here in 1998. Along with his brother Andres, they started playing with the idea of opening a rustic, warm, and easy going establishment where Toronto patrons could enjoy the traditional food and drinks.
In 2006, they opened up Milagro Cantina, the first full service traditional Mexican restaurant in Toronto.
We had the chance to have a quick chat with Arturo Anhalt and learn more about Milagro, how he started it, the challenges he faced, and how Lending Loop was able to help his business growth.
When did you start Milagro and what were the initial challenges in opening a restaurant?
In 2004, my brother and I started putting together the plans for the restaurant. We had never leased a space nor opened up a restaurant in Canada before. It took us 2 years to put together the capital and find a space to lease. In July 2006, we opened Milagro Cantina at 5 Mercer Street. Another challenge for us was convincing our guests and the press that the food we were serving was actually authentic Mexican. Torontonians had become all too comfortable with Tex Mex food and weren’t used to real Mexican cuisine.
By the summer of 2008, I felt like we were finally in a good place. I remember telling my brother, “We’re stable, we’re going to make it.”
But then the US financial crisis came and a year later, the recession hit Toronto. We almost lost everything. Almost overnight, we lost 70% of the sales we had been building up the last two years. I was definitely not prepared for that.
So what did you do during that time? How did you obtain capital to keep your business running?
During that time finding capital was challenging. Even though I had paid off a previous bank loan, the bank was unwilling to finance us at that point. As a result, we turned to a merchant cash advance company. It was our only resource.
This stressful time lasted for more than 4 years. Every year we needed capital to survive through the months of January, February, and March — slow season.
When did you open your second location?
We thought that signing a lease of one of the many locations closing around the city would help reduce the risk of losing our original investment. So we opened up two smaller restaurants — one on Yonge Street and another on Queen Street West in 2009.
By relying on our experience, tight controls, and getting creative with our cash flows, things started to even out again.
How did Lending Loop help your business?
Finding a mid- to a long-term loan for a restaurant in today’s environment became impossible. With over 12 years in operations and positive cash flow for the last 7-8 years, banks would still not lend to Milagro. But when we heard of Lending Loop and its accessible lending model we reached out. And you guys do your research! After meeting the requirements and going through the due diligence process, Milagro was approved and for the first time, I can tell you, I’m not worried about cash flows!
How do you see Milagro’s success?
Since Milagro opened its doors, about 60 new Mexican restaurants have opened and closed in Toronto. What makes us stand out is that we have stuck to the traditional. Lots of trendy spaces with fancy looking tacos have opened, but we have continued to offer traditional, rustic fare. We haven’t changed our menu much — it’s been the same for 14 years. I think a lot of people now recognize that we were here at the beginning of a trend. We’re focused on the quality and authenticity of the food and our dishes. The food in and of itself is beautiful – we don’t need to fluff it up.
Milagro Cantina is a place for patrons who want to enjoy authentic food, spirits, and cocktails and have a great dining experience.